Ingram Micro’s Loss Narrows on Cost Cuts

Technology distribution giant Ingram Micro Inc. reported Tuesday that it narrowed its fiscal third-quarter net loss to $8.3 million, or 6 cents a share, saying it is reaping benefits from a “profit enhancement” program focused on cost cutting.

The distributor of technology products lost $13.3 million, or 9 cents a share, a year earlier. Sales slipped 3% to $5.6 billion in the quarter ended Sept. 28.

Though the economic environment “continues to be challenging,” said the Santa Ana firm’s chairman, Kent B. Foster, a nearly two-year restructuring effort is creating results.

Sales have been rising quarter to quarter -- up 5% from the second quarter -- “and that’s a good, solid sign of stability in the information technology industry,” said Michael J. Grainger, Ingram’s president.

Under its program, prompted by the long slowdown in consumer spending, Ingram Micro has eliminated 3,000 jobs and closed facilities worldwide in the last year. Nearly 700 employees, about 45% in North America, were fired, and the rest of the job loss came from attrition. The program is expected to generate operating income averaging $40 million a quarter in 2004.

The retuning, though, is costing the company $140 million, with the biggest chunk charged against earnings in the last six months.

The company said that $45.1 million of the cost was taken in the third quarter and that a similar amount would be taken in the fourth quarter.

Without that cost, other one-time charges, depreciation, amortization and taxes, the firm would have earned $20.1 million, or 13 cents a share. That is on average 2 cents a share more than analysts expected, according to Thomson First Call.

The results were released after the markets closed. Ingram shares fell 59 cents to $13.36 on the New York Stock Exchange.